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Baniak Pine & Gannon, LLC v. Neomedia Technologies

July 6, 2011

BANIAK PINE & GANNON, LLC, VALAUSKAS & PINE LLC, AND MCDONNELL BOEHNEN HULBERT & BERGHOFF LLP,
PLAINTIFFS,
v.
NEOMEDIA TECHNOLOGIES, INC. AND GEORGE O'LEARY,
DEFENDANTS.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiffs Baniak Pine & Gannon, LLC, Valauskas & Pine LLC, and McDonnell Boehnen Hulbert & Berghoff LLP (together "Plaintiffs") filed suit against defendants NeoMedia Technologies, Inc. ("NeoMedia") and George O'Leary ("O'Leary") (together "Defendants"). Plaintiffs allege in Count II of their Complaint that O'Leary tortiously interfered with Plaintiffs's contract with NeoMedia. O'Leary moves to dismiss. For the following reasons, the Court grants O'Leary's Motion to Dismiss with prejudice.

STATEMENT OF FACTS

The following facts are taken from Plaintiffs's Complaint and are assumed to be true for purposes of this Motion to Dismiss. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995).

Plaintiffs are Chicago-based law firms specializing in intellectual property rights. (Compl. at ¶¶ 2-4.) Since 2001, Plaintiffs have individually or cooperatively represented NeoMedia in intellectual property licensing and patent infringement lawsuits. (Compl. at ¶¶ 8-18.) O'Leary serves as a director of NeoMedia, an Atlanta-based corporation involved in mobile technology and infrastructure solutions. (Compl. at ¶¶ 5-7.)

Plaintiffs and NeoMedia entered into various agreements between 2001 and 2009 specifying the manner in which potential proceeds and contingent fees would be distributed to Plaintiffs.

(Compl. at ¶¶ 8-18.) NeoMedia subsequently withheld certain settlement proceeds and contingent fees from Plaintiffs, in violation of these agreements. (Compl. at ¶¶ 29-33.) On or around November 2, 2009, when Plaintiffs demanded payment, NeoMedia CFO Mike Zima ("Zima") responded that O'Leary instructed NeoMedia to "hold the money [owed to Plaintiffs] hostage" until Plaintiffs agreed to amend the terms of their 2002 agreement. (Compl. at ¶¶ 29-30.) "On information and belief," O'Leary acted for his own interest and benefit in directing Zima and NeoMedia not to remit payment to Plaintiffs. (Compl. ¶ 30.)

Plaintiffs estimate that their uncompensated work on behalf of NeoMedia is currently in excess of $1.75 million and that NeoMedia continues to receive benefits and proceeds in the form of future payments and royalties. (Compl. ¶ 33.).

While Plaintiffs initially named O'Leary in each count of their Complaint, they have since clarified that they only seek relief against O'Leary individually in Count II. (Doc. 20 at 2 n. 1.) Therefore, the Court confines its analysis of O'Leary's Motion to Dismiss to the tortious interference of contract claims alleged in Count II.

STANDARD OF REVIEW

When considering a motion to dismiss under Rule 12(b)(6), the Court accepts as true all facts alleged in the complaint and construes all reasonable inferences in favor of the plaintiff. See Murphy, 51 F.3d at 717. To state a claim upon which relief can be granted, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). "Detailed factual allegations" are not required, but the plaintiff must allege facts that, when "accepted as true . . . 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). In analyzing whether a complaint has met this standard, the "reviewing court [must] draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950. When there are well-pleaded factual allegations, the Court assumes their veracity and then determines if they plausibly give rise to an entitlement to relief. Id. A claim has facial plausibility when the pleaded factual content allows the Court to draw a reasonable inference that the defendant is liable for the misconduct alleged. See id. at 1949.

DISCUSSION

I. Tortious Interference

To establish a prima facie tortious interference with contract claim in Illinois, a plaintiff must allege: (1) the existence of a contract; (2) defendant's awareness of the contract; (3) intentional inducement of a contract breach; (4) actual breach of the contract; and (5) damages. See Cody v. Harris, 409 F.3d 853, 859 (7th Cir. 2005) citing HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 545 ...


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